Lottery games have become a time honored method of raising revenue for state and federal governments the world over. Traditional scratch-off and on-line games have evolved over decades, supplying increasing revenue year after year. However, after decades of growth, the sales curves associated with traditional games seem to be flattening out. Consequently, both lotteries and their service providers are presently searching for new forms of gaming.
To date there has been much speculation about enabling various lottery products to become available to the consumer over the Internet. The benefits are obvious: greater accessibility and a richer gaming environment for the player resulting in enhanced sales. However, there are various jurisdictional laws and statutes (e.g., the United States Wire Act) involving interstate gambling that in the past have brought into question the legality of such an enterprise. Though recently, the United States Department of Justice concluded that the Wire Act's “ . . . prohibitions relate solely to sport-related gambling activities in interstate and foreign commerce . . . .”
In the past, United States lotteries have used the Internet as a vehicle for disseminating information about their lottery organizations, their games, and their promotions. They have also used the Internet for simulations of classic instant ticket games, games solely for entertainment without a fee, a means to communicate with players, for selling subscriptions to traditional lotto games, and for second chance drawings—drawings for prizes resulting from non-winning experiences based on the sale of a regular lottery ticket through historic channels. However, now that it would appear that Internet lottery games are to become part of the fare offered by US (and other jurisdictions) lotteries, appropriate adherence to lottery security and fair play standards is essential, as is designing a mechanism that meets applicable political and legal constraints.
To ensure that these standards and constraints are maintained through the rollout of Internet gaming, it is logical to, initially at least, provide Internet games of a deterministic nature, wherein the outcome (i.e., prize winning status) is regulated either by a secured validation file or some form of Pseudo Random Number Generator (PRNG). The significant point being that the game outcome is determined by lottery-controlled factors outside of any decisions or controls available to the consumer of the Internet game. This type of deterministic gaming mimics the games currently offered by lotteries (e.g., scratch-off tickets, Pick 3, Pick 4, Powerball, etc.), thereby making it a simpler task to ensure that security and standards are maintained.
However, over the years United States lotteries have come to appreciate the virtues of producing games with more entertainment value that can be sold at a premium price. For instance, ten-dollar scratch ticket games with higher paybacks, and more ways to win now account for over $5 billion a year in United States lottery sales. Making Internet delivered games more challenging and introducing skill levels (e.g., Internet Poker) may help attract a new player base and consequently increase revenue. Additionally, since more challenge gaming formats often require a large player base, an ideal security audit system would also accommodate networking players as well as jurisdictions together while still ensuring fairness and auditability. Thus, while initially lottery controlled Internet gaming sites may be limited to deterministic games, an ideal security and audit system would create a foundation that allows for the gradual expansion of lottery Internet gaming themes to evolve to include player alterable games over a large player base ultimately allowing a player's decision to influence the game's outcome and thereby determine if he or she has won a prize.
Moreover, as gaming technology and systems continue to evolve and become more sophisticated, numerous new types of lottery related games and products become available that require new methods of security and auditing to ensure lottery rules are maintained. Thus, it is highly desirable to develop a lottery Internet gaming platform that provides security and auditing methods for new Internet gaming opportunities. Ideally this lottery Internet security platform should be evolutionary in nature, starting with a familiar format that gradually introduces a consumer to Internet and other new gaming formats.